September new light-vehicle sales fell for the 5th consecutive month to a SAAR of 1.2 million units, reported the National Automobile Dealers Association (NADA).
This is the lowest the SAAR has been since May 2020’s SAAR of 12.1 million units.
J.D. Power cites tight inventories that have limited both fleet and retail sales as the reason for the dip, with the organization noting that fleet sales accounted for just 12% of total sales volume.
The automotive industry kicked off September with record low inventory levels of 1.06 million units. Analysts expect that figure to show little change when month-end data rolls in.
Unprecedented demand would push sales rates closer to 17 million units, but limited inventory levels continue to cap light-vehicle sales.
Average transaction prices continued their upward climb in response to heightened consumer demand, limited vehicle availability, and significantly reduced incentive spending. J.D. Power predicts average transaction prices will jump to $42,800—another all-time high and representing the fourth consecutive month average transaction prices will exceed $40,000.
However, average incentive spending is expected to hit an all-time low at $1,755, down $2,037 from September 2020.
The trend for dealerships to sell cars very quickly once they receive them also persists. The average time a new vehicle sat on a dealership lot fell to 23 days in September, down from 25 days in August, and 54 days in September 2020, according to J.D. Power.
The microchip shortage continues to wreak havoc on the industry, costing the global automotive industry 9+ million units of production; a loss of 1.2 million more than expected. In North America, vehicle production is down by over 2.9 vehicles, with a drop of 300,000 units likely.
Experts forecast inventory levels will not change much in October and that fourth-quarter sales will be lower than expected as the chip shortage persists.
“Because of the reduced sales pace seen in third-quarter 2021 and a dour outlook for sales and production in the fourth quarter, we have reduced our full-year sales forecast to 15.2 units,” NADA reported.